He also said consumers could continue to put off discretionary purchases particularly if tax rates go up and paychecks shrink in January.
Dana Telsey of Telsey Advisory Group said consumer confidence will be important for retailers next year. "We need stability and some decisive actions to get the consumer comfortable again," she told CNBC.
In this more uncertain environment, Hottovy likes low-price retailers Amazon.com and Costco. He is also recommending late-stage cyclicals — like Home Depot and Williams-Sonoma — that may do well as the housing market continues to recover.
(Read More: Amazon Most Satisfying Website to Shop: Report)
Telsey said retailers with the right product, pricing and that can expand their brand should be standouts in 2013.
She pointed to Nordstrom, Urban Outfitters and Michael Kors. Nordstrom continues to expand its The Rack stores, while Urban Outfitters continues its turnaround. Michael Kors is more of a first-half story, Telsey said, as demand for accessories should remain strong.
Tiffany is a turnaround story for the second half, Telsey said. "Tiffany is working on its product," she said. "Its silver business, which is a high-margin category, didn't have enough novelty or newness. Hopefully that's something it can fix for next year."